Creating value and driving sustainability, accountability and the digital agenda through Public Sector Innovation

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ACCA leads the debate on Public Sector Innovation with EU experts at the European Court of Auditors and calls for more radical change

Governments around the world face a vast array of challenges, from declining public trust to technological disruption, from budget reductions to talent shortages, which all need innovative responses. But in the face of demanding and often disgruntled citizens, new economic, social and environmental challenges, as well as accelerating technological change, will an incremental, largely managerially-mandated, model of innovation be sufficient?

To help provide some much needed light on this question, and as part of its quarterly brand theme on the “power of connections”, ACCA organised a Conference titled Creating value and driving sustainability, accountability and the digital agenda through Public Sector Innovation* at the European Court of Auditors in Luxembourg.

The impressive line-up of experts “myth busted” the assumption that “innovation” and the “public sector” are antithetical, and discussed how to cultivate public sector innovation. The second panel explored areas where governments are applying innovative practices to improve outcomes for citizens, create value, while driving sustainability, accountability and the digital agenda, including Blockchain.

Lazaros S Lazarou, Member of the European Court of Auditors, Dean of Chamber V ‘‘Financing and administering the Union’’ and a Member for the Annual Report, who hosted the event said: “To address today’s interconnected challenges, we need to move from incremental to more radical innovation – resulting in full system changes that fundamentally rework how we deliver public services. This is also the answer emerging from the new ACCA report on Innovation in public finance, which makes the case for more radical innovation in public finance, while demonstrating that the finance function must play a central role in completing this journey.

‘Leaders need to be able to experiment and adapt. Of course, dynamic change on this scale is risky, and bringing new ideas to life can be disruptive. Unlike the private sector, moving to radical innovation for the public sector is a challenge in itself – stability has to be sustained. But ultimately, as many of those who responded to the ACCA’s survey recognised, aiming for transformation may be less risky than hoping it can be avoided. They find that status quo is no longer an option.’

This was echoed by Alex Metcalfe, Head of Public Sector Policy at ACCA who moderated the first panel session: ‘Pressure for continuity is particularly understandable in a sector where changes to public services could negatively impact some of the most vulnerable in society. Innovative ideas must also come from frontline and citizen initiative, and not simply rely on top-down visions of the future. For this to happen, we need to create new collaborations and perhaps also think differently about leadership.’

Discussions confirmed that the public sector can, and should, be a driver of innovation. Creating innovation through governments and the public sector is often the most impactful but also the harder route. The OECD - OPSI model shows that innovation needs to be supported in different ways and as a consequence, there are a variety of approaches - top down/bottom up- to cultivate innovation in the public sector.

The debate also revealed that a common element among the different paths towards innovation is the participatory role of employees in designing and implementing the practice, along with dialogue with employee representatives regarding changes and the future of the service. It also highlighted the importance of collaborative innovation, where the public sector develop new services, policies, technologies or processes together with other government organisations, private actors and citizens.

Brian McEnery, Head of Advisory at BDO, and Former ACCA President, moderated the second panel. He concluded: ‘Innovation is not just for entrepreneurs and ‘rule-breakers’. It takes team work to innovate, people with a diverse range of perspective, insights and skills who can meet the challenges of radical innovation. Radical ideas will often come from a wider network of stakeholders – a wider innovation ecosystem - including the users involved in a programme or service. It is through thepower of connections that new ideas can translate into concrete actions that will achieve change in the public sector finance function, and public finance professionals must play a role as key enablers and supporters of this change.’

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.